3 Strategies for Increasing the Cash Flow of Your Real Estate Properties

In real estate investing, cash flow is the profit you bring after collecting all income, paying operating expenses, and setting aside reserves for future repairs. Depending on the case, the cash flow can be negative, break even, or positive. A real estate investor should always aim to reach positive cash flow, and here are three ways to achieve it.

1. Add New Amenities

While rental properties are vacant, they are not producing cash flow. Still, owners can undertake projects to make the property more attractive, and it may generate more monthly rental income. As you research your local rental market, find out what amenities will bring you the best long-term returns. These include replacing flooring, renovating the kitchen, and renovating the bathroom. Also, installing a washer and dryer or a dishwasher may cost some money upfront, but most renters are willing to pay more monthly for these conveniences. The improved cash flow may mean the projects pay for themselves over a measurable amount of time. Improvements in kitchens and bathrooms generally have a better return on investment.

2. Increase the Rent

Owners of rental properties that provide an excellent place to live shouldn’t shy away from steady rent increases. Many rental property owners fear that residents will leave if they raise the rent, but if the increases are reasonable, residents may find that moving outweighs the costs of staying. If you already have tenants, don’t change the rent for all of them at once. Wait to make increases until it is time for each tenant to renegotiate their lease. If you can, avoid making significant increases during holidays or trying times. This will help you to stay on good terms with your tenant and keep your property occupied and earning income.

3. Decrease Expenses

In addition to increasing income, decreasing monthly costs will also keep your cash flow healthy. Examine your budget for what you are willing to give up to save money. To do this, it is necessary to identify the highest expenditure items and to reduce them. You can take action on the rental charges that are not billed to the tenant. This could be the heating, the electricity or the internet. It is also essential to compare the prices when choosing a craftsman for repairs, as the expenses caused by the work affect the amount of your cash flow.

Investor Loan Source, a private money lending company, provides high-quality investment property loans to private real estate investors at the lowest costs possible. Our process for providing real estate investors with private lending is unique. We place emphasis on the hard asset and value of the collateral (property) and less on the borrower. Our asset-based real estate investment loan model means we can provide more money lending to more investors than is available from standard bank loan models. At Investor Loan Source, providing real estate investors hard money loans is our business; it’s all we do. We offer several business real estate loan products designed to serve a variety of investors and property profiles, including private money lending for properties to sell on owner finance. 

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